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At the end of the construction year for his business. Ian's uncle Richard is having trouble dealing with the company's indirect costs as there are
At the end of the construction year for his business. Ian's uncle Richard is having trouble dealing with the company's indirect costs as there are just so many of them! to help his uncle and because he hopes to take over the family business one day Iam listed a few examples of what he thought would be indirect costs for this company: glue, nails, staples, drywall compound, and tape. Richard then added supervisor costs, as well as depreciation of the construction trucks generators, saws, and other equipment, to the list. Unfortunately, the total of these MOH costs, $ significantly exceeded Richard's budgeted MOH of $
In the past, Richard assigned MOH costs to individual job based on the direct labor hours of his employees. At the beginning of the year, based on the work he had planned and still hoped to earn at that time. Richard budgeted for DL Hours. In reviewing the payroll records of his employees. Richard now sees that that they actually worked hours this year while receiving an average wage of $ per hour. Wow, business must be good!
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